Section 7. The Functions that Supported Globalization
Item 5. Global Initiatives in Management Groups
Globalization of the management structure
In this way, "global" became the keyword in TMC's business operations at the start of the 21st century and was used in many organizational names. Whereas there had been no organizational name on the divisional level or equivalent with the "Global" prefix in 1997, a total of eight divisions and one department in 2007 used the prefix as part of their names. Examples included the Global Audit Department and the Global Purchasing Planning Division.
Against a backdrop of intensifying global competition, TMC implemented major management structural reform in June 2003. The number of directors was dramatically reduced and a new managing officer system (equivalent to an executive officer system) was established. Only those in senior managing director and higher positions were made directors, reducing the number of directors by more than half from 58 to 27, with 39 newly appointed managing officers in charge of the operation of various divisions. Additionally, the number of outside auditors was increased from two to four to enhance the auditing function.
During this director reshuffling, the executive vice president of Toyota Motor Sales, U.S.A., Inc. and the presidents of Toyota Motor Manufacturing, Kentucky, Inc. and Toyota Motor Manufacturing (UK) Ltd. were appointed managing officers of TMC, making them the first non-Japanese to be executives of TMC. This signified the first step in TMC's efforts to globalize its human resources.
The new management structure also attached importance to flattening the decision-making hierarchy, and introduced a system in which final decisions related to divisional operations were made by senior managing directors in charge of the division or at a lower level. In other words, the reformed system required senior managing directors to make speedy decisions rooted in the actual operations for which they were responsible, while also being involved in management issues from a company-wide viewpoint.